When customer is paying more than their outstanding amount, and a refund is required, users could key in the transactions as below:

Scenario:
Outstanding Invoice 1234 is $1200
Customer cheque is $1350
Challenges:
Need to refund customer $150
Need to ensure that the bank reconciliation shows the correct amount, which is $1350 (instead of $1200).

When clicking CUSTOMER -> SETTLEMENT to knock off the customer invoice, users could fill in the cheque column as $1350, and yet, record a -$150 into the "OTHER" cashbook.
That way, the outstanding amount of $1200 would be knock off with the Receipt amount of $1200 nicely. The cheque amount would also be kept at $1350, which makes the bank reconciliation correctly.

Now, we have a -$150 inside the OTHER cashbook, and extra $150 in the cheque/bank (collecting extra from the customer),  what are we going to do about it?

We will perform a CASH TRANSFER from the cheque/bank cashbook to the OTHER cashbook. This CASH TRANSFER is like a Payment Voucher out from the cheque/bank cashbook to pay back to the customer. The CASH TRANSFER NOTE is remarked with the cheque number etc.